PLUS THERAPEUTICS, Inc.

Good afternoon, ladies and gentlemen. Welcome to the PLUS Therapeutics first quarter 2021 results call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you'd like to ask a question at that time, please press star 1 on your touch-tone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing the pound key. We ask you that you please pick up your handset to allow optimal sound quality. If you should require operator assistance, please press star zero. Before we begin, we want to advise you that over the course of the call and question and answer session, forward-looking statements will be made regarding events, trends, business prospects, and financial performance which may affect PLUS Therapeutics' future operating results and financial position. All such statements are subject to risks and uncertainties. including the risks and uncertainties described under the Risk Factors section included in PLUS Therapeutics annual reports on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commissions from time to time. PLUS Therapeutics advises you to review these risk factors in considering such statements. PLUS Therapeutics assumes no responsibility to update or revise any forward-looking statements to reflect events, trends, or circumstances after the date they are made. It is now my pleasure to turn the floor over to Dr. Mark Hedrick, Plus Therapeutics President and Chief Executive Officer. Sir, you may begin.

Great. Thank you, Catherine. Good afternoon, everyone, and thank you for taking the time to join us today as we provide an overview of recent business highlights and discuss our 2021 first quarter results. Joining me on the call today is Mr. Andrew Sims, our Chief Financial Officer. Before Andrew provides a summary of our financial performance, I would like to provide an update on the company's business activities since our last earnings call. For those of you new to the company, PLUS develops complex, innovative therapeutics for rare and difficult to treat cancers, such as cancers of the central nervous system. Our aspiration from a drug development perspective is to leverage our expertise in drug formulation, nanoparticle drug design, drug manufacturing and scale-up, and expertise in novel delivery technologies to provide better tumor targeting and killing, a greater safety profile, and ultimately better clinical outcomes. Towards that goal, in 2020, we broadened our expertise and technology platform to include the use of radionuclides in our drug formulations. Our lead drug is RNL, rhenium nanoliposomes, which is a proprietary liposomal encapsulated radionuclide. The active agent is the rhenium-186 isotope, which is a dual-energy emitter releasing both cancer-killing beta particles and gamma particles, which are useful for imaging. Our initial indication for RNL is recurrent glioblastoma, which affects approximately 12,000 patients annually in the U.S., and about the same number of patients in the EU. It is the most common and lethal form of brain cancer, and the treatment of this devastating disease remains a significant medical challenge. Published studies indicate that external beam radiation provides the best incremental improvement in survival of all therapies currently used for glioblastoma. and it remains an essential component of multimodal therapy for both glioblastoma and, in fact, many other cancers. In theory, though, glioblastoma and, indeed, any tumor can be fundamentally controlled if a sufficient dose of radiation can be delivered to that tumor. With R and L, it may be possible to deliver a radiation dose only to the tumor that is perhaps 20 times higher than can be given with external beam radiation therapy. And despite the super high doses of radiation delivered by R and L, and precisely because of its inherent tumor targeting capability, unwanted radiation exposure to nearby healthy tissue is actually reduced. This compares favorably to the most commonly used chemotherapies as well as external beam radiation which is associated with significant side effects that occur due to their deleterious effects on normal tissues. Preclinically in animals, RNL has shown the ability to deliver almost 2,000 gray, substantially prolonging survival and ablating brain tumors such that cancerous cells cannot be observed in the microscope. So our R and L product is currently under evaluation in the U S respect trial, which is a dual phase one, two multi-center sequential cohort, open label volume and dose escalation study of the safety tolerability and distribution of one 86 R and L administered by convection enhanced delivery to patients with recurrent or progressive malignant glioma after standard surgical radiation, and or chemotherapeutic treatment. The study uses a modified 3 plus 3 Fibonacci dose escalation scheme followed by an expansion at the MTD or maximum tolerated dose to determine efficacy. In addition, the trial is funded to a significant degree by the U.S. National Cancer Institutes. And in short, the trial is progressing nicely. In November 2020, we provided an interim analysis on the first 15 patients enrolled introspect, specifically going through the fifth cohort. And that data set can be found on our website. In this interim look, it showed that intratumoral RNL can successfully deliver approximately 15 times the absorbed dose of radiation that can be administered by standard external beam radiation therapy without significant toxicity. RNL was well-tolerated with no dose-limiting toxicity observed, despite markedly higher absorbed doses of radiation compared to EBRT. Most recently, in March of this year, in our BioEurope corporate presentation that can also be found on our website, we provided an interim update through Cohort 6. In summary, we found that it's feasible to deliver 8.8 cc of RNL loaded with 22 0.3 millicuries of radiation safely without treatment-related serious adverse events. In fact, most adverse events were causally unrelated to RNL except scalp discomfort considered related to the surgical procedure itself but not the drug. High absorbed doses were delivered to the brain, nearly 600 gray, but only with very limited systemic radiation outside the brain. In fact, there was about approximately 3,000-fold difference between radiation to the brain versus the body, hence the absence of systemic effects of the radiation. There were two long-term survivors greater than 30 months. And in terms of overall survival, median and mean survival duration in subjects with tumor coverage greater than 75% was at the time 8.3 months and 12.9 months respectively. with six patients still alive. Median survival duration with tumor coverage less than 60%, which was largely the Bev failure patients, was 4.9 months with one patient still alive. Rather than escalate to cohort seven after cohort six, the DMSB, Data Monitoring Safety Board, elected to treat an additional three patients at the cohort six dose and volume but increased the convection rate to 20 microliters per minute. Based on the physics of convection, the presumption is that enhanced R and L distribution in the brain will be observed and therefore better coverage of the residual non-enhancing tumor cells achieved and in theory ultimately better patient outcomes. Our experience thus far points to tumor coverage correlating with length of survival. which makes sense because 90% of occurrences occur within about two centimeters or less of the primary. Furthermore, the increased convection flow rate will shorten the time to deliver the drug and make it easier on the patient and hospital staff. Thus far, two to three planned additional patients at 20 microliters per minute have been successfully treated with others in screening. Thereafter, the DSMB will evaluate the data and discuss and make recommendations. Potential next steps, assuming no emergent dose-limiting toxicities are observed, include, but are not limited to, escalating to dosing cohort seven, enrolling additional patients at the current levels with further changes in the delivery parameters, or simply moving directly to the phase two expansion cohort at the recommended phase two dose. As an aside and running in parallel to the Phase I and besides and sort of outside the direct clinical objectives of the trial, also being developed in conjunction with academic collaborators is a mathematical model to better predict the spatial and temporal distribution of R and L delivered by convection. Data collected by the Phase I by imaging, when interpreted and analyzed will help create a mechanism-based model of delivery and hopefully facilitate the increasingly more accurate delivery of RNL in the phase two expansion component of the trial and therefore maximize the clinical outcomes. Regarding additional clinical development programs for RNL, a priority for us in 2021, as we've explained previously, has been to begin development clinically with RNL and additional indications. To that end, we submitted two RNL pre-IND meeting briefing packages to the FDA, one for leptomeningeal metastases, the other for pediatric brain cancers, including ependymoma, high-grade glioma, and diffuse intrinsic pontine glioma. We plan to conduct these pre-IND meetings with the FDA for both indications in 2021 understand any gaps that may exist in the preclinical data, fill those as needed, and initiate those trials as soon as 2021. Both indications represent significant unmet medical needs. And, for example, in LM or leptomeningeal metastases, that affects about 110,000 patients in the U.S. and has no clear standard of care. And these patients actually die very rapidly despite the care that is currently provided to them. As for pediatric brain cancers, though much rarer, they carry an equally poor prognosis. And the treatment approach we envision for pediatric brain cancer would mirror our approach in adults with glioblastoma using the direct targeting of the tumor and convection-enhanced delivery. Now, regarding our manufacturing and supply chain development, which has been a key focus of our team of late, In the first quarter this year, we entered into a master services agreement with Pyramol Pharma Solutions for the development, manufacture, and supply of R&L immediate drug product. Essentially, they'll make the liposome for us for the long term. We anticipate that this will lead to clinical and commercial supply agreements for the drug product at the appropriate future stage of development, and we are working on those, and we are on track in terms of our development and CMC timelines. Now, at this point, I'll turn the call over to Andrew for a brief review of our first quarter financial results. Andrew.

Thank you, Mark, and good afternoon, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the first quarter ended March 31, 2021. As of March 31, 2021, cash and cash equivalents were $14.4 million compared to $8.3 million as of December 31, 2020. Cash used in operations for the first quarter of 2021 was approximately $3 million compared to $1.5 million in 2020. This difference is mainly due to timing differences on when certain accounts payable and accrued expenses were paid in 2020, in particular relating to barter and professional fees. There were no revenues in the first quarter of 2021 as compared to approximately $118,000 in the same period last year. This decrease was due to the closeout of the BARDA contract as previously disclosed. Research and development expenses were $1.1 million for the first quarter 2021 as compared to $0.9 million for 2020. The increase was primarily due to the additional R&L development costs. G&A expense was $1.4 million for the first quarter 2021 as compared to $1.6 million for 2020. The decrease was primarily driven by reduction in professional fees and recruiting expenses. Interest expense decreased for the first quarter 2021 to approximately $247,000 from approximately $349,000 for the same period in 2020, reflecting the principal pay down in 2020. Net loss for the first quarter 2021 was $2.7 million as compared to a net loss of $1.1 million for the first quarter 2020. The net loss was consistent year-on-year when excluding the book gains on the warrants reported in the first quarter of 2020. This required book transaction was eliminated in the second quarter of 2020 when the Series U warrants were amended. And now I'll turn it back to you, Mark.

Great, Andrew. Thank you. So let me just summarize our forthcoming milestones, and then we'll move to Q&A. So we intend to complete enrollment of the RESPECT Phase 1 study in recurrent glioblastoma as soon as we get to the recommended Phase 2 dose and then proceed with the trial. We plan to complete the pivotal trial planning with the FDA in parallel for RNL for recurrent glioblastoma and then complete the key CMC activities as I mentioned before. We also plan to complete the pre-IND meetings, as mentioned, with the FDA, execute any IND-enabling studies if needed, and move into clinical trials for our follow-on RNL indications, leptomeningeal metastases, and pediatric brain cancer. We also plan to continue to develop and evaluate additional external and internal drug development candidates to bolster our pipeline And then we can continue to explore through our partnership discussions for our three clinical stage injectable drugs, RNL, DOSA+, and generic DOXO+. And with that, those are our prepared remarks. I'll turn it back over to you, Catherine, for Q&A.

The floor is now open for questions. At this time, if you have a question or comment, please press star 1 on your touchtone phone. If at any point your question is answered, You may remove yourself from the queue by pressing the pound key. Again, we do ask that while you pose your question, you pick your handset up to provide optimal sound quality. And your first question is coming from Sean Lee with HC Wainwright.

Good afternoon, Mark and Andrew. Can you hear me?

Yeah.

Hey, Sean. Hi. Thanks for taking my questions. My first question is on the respect study. So you mentioned that the DMC has decided to do an expansion cohort on number six instead of going to a cohort seven. So should we take it that the doses used in cohort six is likely going to be the ones you guys use in the next phase?

Sean, it could be. I presented what I thought were the most likely outcomes in the script. We did not see dose-limiting toxicity in the sixth cohort. Typically, that would be the reason to stop there and take that dose forward. We're kind of using the Phase I not only to get the recommended Phase II dose, but also to ensure that we go into the next trial with the appropriate delivery parameters. And so I think we're maybe getting a little bit greedy here, but we're delivering so much radiation that we can – we're essentially, you know, how many times can you kill the same cancer cell? So part of what we're trying to do is to get that microscopic disease that's non-enhancing on the scans, and we do that effectively by increasing the flow rate, which correlates to increasing the pressure and pushing the leading edge of the radiation out into that microscopic disease. So it may be that this current dose of cancer 22.3 millicuries at about almost 9 cc is what we take forward. But I think we'll just have to see. We could conceivably go to a cohort 7 as well, but with this increased flow rate.

Got it. When do you think we'll be able to get the next update from cohort 6 in terms of data?

Yeah, we actually – The Snowmageddon in Texas at the end of February, because all three of our sites are in Texas, actually made into February and March light months. So things were covered in April. There are a lot of patients in screening. As I mentioned, we've treated two out of the three patients. So I think we – It may be the next earnings call, or if we make a decision prior to that, we may just put that news out at that time. So either before or likely the next earnings call.

Thanks for that. My next question is on the CMC side. So with the tech transfer and the master services agreement with Paramo, what's the expected timeline on that? When do you expect you have CMC ready for, for example, a pivotal study?

So, yeah, good question. We're on track from a timeline perspective. So we've We sort of said, you know, we want to have drug ready for a registrational trial by around the end of 2021. And so we're on track to do that. Phase two drug supply, as we contemplate an expansion cohort of the phase one, we'll be ready for that as well. But that's a different supply chain, if you will, for that. So we're on track for both of those. with kind of the end of 2021, early 2022 is sort of the timeline to have that drug available.

I see. My last question is on the potential for the next pivotal study. So what are your thoughts on the designs of this study? Would you be looking to go at it with the traditional randomized randomized phase three or an adaptive phase two, three with adaptive design, or would you participate in one of the other studies that are going on, such as GBM Agile?

Yeah, so let me break that down, because actually, so in terms of the phase one, two, that trial is fairly locked in. That's 55 patients, estimated 21 to get the maximum tolerated dose, and excuse me, up to another 34 patients at the recommended phase 2 dose. So that's fairly well locked in. I don't see, excuse me, as likely to make many changes there. In terms of the phase 3, you know, I think what I think I could say is we're likely to look at overall survival as a primary endpoint. The number of patients is going to be based on what we see in the combination of the phase 1, phase 2, at the recommended Phase II dose. I anticipate we'll use a synthetic control arm in that. Those will be patients that are very likely have had no more than one recurrence, and they're bad, naive patients. As you know, those do very poorly, and they don't conduct very well. So I don't see us... you know, kind of randomizing one-to-one against definitive care, I see us using potentially a synthetic control arm or participating in the Agile control.

I see. Thanks for the additional color. That's all I have.

Thank you, Sean.

Your next question comes from the line of Ed Wu with Ascendant Capital.

Thank you for taking my questions. I had a question more on the three sites that you have running. I know you mentioned that there was a storm again that kind of delayed things, but is everything back on track? Any COVID issues? And also, have you thought about potentially expanding the sites?

Hey, Ed. Yeah, I mean, it was really just, you know, maybe a four- or five-week delay. We typically screen patients every week, so just patients couldn't travel permanently. All of our sites are in Texas. Texas got hit pretty bad. So we're back to normal. We're screening multiple patients a week now. So things are going well. We're doing a lot of work to get the word out about the trial, and I think that's helping us when we're looking at some other ways to do that. And then to your point about trial expansion, so, yes, we absolutely are talking to additional sites. Probably not thinking as much about the Phase I as, as an expansion cohort at the recommended Phase II dose so that when that decision is made, we'll be ready to get those sites on board and trained. And then those sites ultimately will go into a registrational trial assuming we get there. Convection-enhanced delivery, we know who the high-volume sites are, and we'll be going to those sites, you know, early on in that process to the degree we haven't gone to them already.

Great. And then, you know, you mentioned that there's additional indications that you have, you know, on the file on IND possible.

Edward, you're cutting out. I'm sorry, can you hear me now? Yeah, I think so. Yeah, go ahead. All right. Catherine, maybe if Edward maybe can call back in or jump back in, that would be great. Maybe if there's somebody else in the queue, we could go to them. Hello?

And there are no further questions at this time. I'd like to turn the floor back over to you, Dr. Hedrick, for any additional or closing remarks.

Okay, great. Thank you, Catherine. Sorry about those technical difficulties. I just want to thank everyone that joined us on the call and the analysts that participated in the call. And also I'd just like to take a moment to say thank you to our employees who who work so hard and are so dedicated to trying to find a solution for glioblastoma and other rare cancers. And then I'd also like to specifically thank the patients and the doctors and the hospital staff who we spend a lot of time with, and they help really support and make our clinical trials happen. So thanks again, and please have a good evening.

Thank you. This does conclude today's conference call. Please disconnect your line at this time and have a wonderful day.